KraneShares CSI China Internet ETF
Transcription
KraneShares CSI China Internet ETF
Brendan Ahern Chief Investment Officer +1 (646) 218 9852 [email protected] KWEB Data as of 03/31/2015 KraneShares CSI China Internet ETF Ticker KWEB Fund Description Primary Exchange NASDAQ KraneShares CSI China Internet ETF seeks investment results that correspond generally to the price and yield performance, before fees & expenses to the CSI China Overseas Internet Index. Cusip 500767306 ISIN US5007673065 Index Description Management Fee 0.68% The CSI China Overseas Internet Index invests in China based companies whose primary business or businesses are focused on internet and internet-related technology. These companies are publicly traded on either the Hong Kong Stock Exchange, NASDAQ Stock Market or New York Stock Exchange. Inception Date 7/31/2013 Distribution Frequency Semiannually Index Name CSI China Overseas Internet Index Ticker H11137 Number of Names 53 Listing Exchanges of Holdings NASDAQ, NYSE, Hong Kong The China Internet Evolution The Chinese internet sector has seen tremendous growth over the past few years. In 2014 China’s e-commerce market size surpassed the U.S for the first time. With a total market penetration of only 48% compared the U.S at 87% there is potential for substantial continued growth in the China internet sector. China / US Internet Statistics China US 649mm 280mm 48% 87% Country’s share of world internet users 22.1% 9.6% E-commerce market size 2014 $390b $304b Total internet population % of population with internet access China internet population data as of 12/31/2014 from a report by the China Internet Network Information Center (CINIC) issued on 2/03/2015. US internet population data from internetlivestats.com as of 12/31/2014. China e-commerce market size from iResearch as of 12/31/2014. U.S e-commerce size from U.S Department of commerce data as of 12/31/2014 Top Ten Holdings As of 03/31/2015 Subject to Change. Ticker % TENCENT HOLDINGS LTD 700 HK 10.556 JD.COM INC-ADR JD 8.208 ALIBABA GROUP HOLDING ADR BABA 7.865 BAIDU INC - SPON ADR BIDU 7.284 NETEASE.COM INC ADR NTES 6.35 CTRIP.COM INT'L ADR CTRP 5.245 VIPSHOP HOLDINGS LTD ADR VIPS 5.025 KINGSOFT CORP LTD 3888 HK 3.944 SINA CORP SINA 3.515 QIHO 360 TECHNOLOGY LTD QIHU 3.487 KWEB Performance History as of 03/31/2015* Cumulative Annualized Calendar QTR 3/31/2015 3 Mo 6 Mo Since Inception 7/31/2013 1 Yr Since Inception 7/31/2013 Fund Nav 4.59% -1.33% 38.28% -4.09% 21.47% Closing Price 4.87% -1.07% 38.44% -4.17% 21.55% Index 4.84% -0.99% 36.70% -4.43% 20.63% *Cumulative return is the aggregate amount that an investment has gained or lost over time. Annualized Return is the average return gained or lost by an investment each year over a given time period. The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. ETF shares are not redeemable with the issuing fund other than in large Creation Unit aggregations. Instead, investors must buy or sell ETF Shares in the secondary market with the assistance of a stockbroker. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling. The NAV of the Fund’s shares is calculated each day the national securities exchanges are open for trading as of the close of regular trading on the New York Stock Exchange (“NYSE”), normally 4:00 p.m. Eastern time (the “NAV Calculation Time”). Shares are bought and sold at market price not NAV. Closing price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined). An active secondary market for the Fund’s shares may not exist. Although the Fund’s shares will be listed on an exchange, subject to notice of issuance, it is possible that an active trading market may not develop or be maintained. There is no guarantee that distributions will be paid. Brendan Ahern Chief Investment Officer +1 (646) 218 9852 [email protected] KWEB Data as of 03/31/2015 Baidu – Alibaba – Tencent (BAT) • BAT companies generated revenue of $32.3 billion in 20141 and $9.89 billion in Q4 2014.2 • The aggregate market value of the three companies equals $454 billion.3 • The companies are internet and e-commerce ecosystems involved in both distinct and competing markets. • The BAT core businesses are distinct: Baidu – search, Tencent – games & instant messaging (IM), Alibaba – e-commerce. • They increasingly compete with one another. • Boutique firms have carved out niches that allow them to compete with BAT or partner with them to leverage their core business audience. 1.) Source: Baidu, Alibaba, Tencent Annual Reports 2.) Baidu, Alibaba, Tencent Q4 2014 earnings reports 3.) Source: Based on 3/31/2015 market cap from Bloomberg Brendan Ahern Chief Investment Officer Aaron Dillon Managing Director +1 (646) 218 9852 [email protected] +1 (347) 642 2640 [email protected] About KraneShares: KraneShares, a product of Krane Funds Advisors, is focused on serving global investors with ETFs for the next-wave of China’s development. Founded in 2011, our New York based firm offers proprietary ETFs constructed to give US and global investors broad, diverse and quality exposure to China’s historic growth story. KWEB invests in variable-interest entities (VIEs), which are investments in foreign-domiciled American Depository Receipts (ADRs). Rather than owning Chinesedomiciled entities, the VIEs have contractual arrangements designed to provide the economic benefits related to certain Chinese-domiciled companies. The structure of VIEs presents some unique risks that should be considered. VIE structures do not give investors ownership in the operating company, as stock does. With a VIE, an investor has no direct claim on the core, restricted business assets of the VIE operating company. As a result, investors may not exert as much influence over the subject company as they could if they were owners of common stock. Often, the voting rights in the VIE operating company, especially in matters of corporate governance, are controlled by the principals who established the VIE operating company. In addition, there is no guarantee as to the enforceability of the VIE structure, as it has never received explicit approval from the Chinese government and is recognized as a structure put in place principally to work around Chinese restrictions on foreign investment. ©2015 KraneShares Carefully consider the Funds’ investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Funds’ prospectus, which may be obtained here: kraneshares.com/resources/kraneshares_kweb_prospectus_2014.pdf Read the prospectus carefully before investing. Investing involves risk, including possible loss of principal. There can be no assurance that a Fund will achieve its stated objectives. The Funds focus their investments primarily with Chinese issuers and issuers with economic ties to China. The Funds are subject to political, social or economic instability within China which may cause decline in value. Fluctuations in currency of foreign countries may have an adverse effect to domestic currency values. Emerging markets involve heightened risk related to the same factors as well as increase volatility and lower trading volume. Current and future holdings are subject to risk. Narrowly focused investments typically exhibit higher volatility. Internet companies are subject to rapid changes in technology, worldwide competition, rapid obsolescence of products and services, loss of patent protections, evolving industry standards and frequent new product productions. Such changes may have an adverse impact on performance. The KraneShares ETFs are distributed by SEI Investments Distribution Company, which is not affiliated with Krane Funds Advisors, LLC, the Investment Adviser for the Fund. www.KraneShares.com